The British Olympic Association has taken the dramatic and unprecedented step
of filing a potential multi-million pound claim against the London 2012
Organising committee to the Court of Arbitration for Sport.

Facing a problem: Seb Coe, chairman of Locog, has found his organisation at the centre of an embarrassing disputePhoto: AP

In the process the BOA has included as respondents the International Olympic Committee – a rare and bold move – and the Mayor of London.

The heightened action, executed on Thursday at the CAS headquarters in Lausanne, Switzerland, has highlighted both the extensive tension between the BOA and Locog, two major organisations charged with delivering a successful London Games, and the embarrassing personal rifts between members of the Olympic Games board.

At stake is a possible Olympic windfall of many millions for the BOA and a much bigger independent sporting legacy fund if it can successfully argue to the court that the host city contract it signed with the Mayor of London and the IOC, as well as the associated joint marketing programme agreement it signed with Locog, should distribute profits before it includes the costs of staging the Paralympics.

“The fulfilment of this promise is so important to the BOA that we are now seeking a speedy, final and binding decision through the Court of Arbitration for Sport on how the Olympic Games surplus should be determined,” the BOA said in a statement.

Locog said the dispute was a “technical point” and expressed confidence it would be resolved.

Locog said:”This will not affect the delivery of the London 2012 Olympic Games and Paralympic Games... neither will it affect our athletes.’’

If there is an Olympic surplus there is a three-way cut: 60 per cent to a trust fund to help pay for the country’s sporting facilities and grassroots sports, 20 per cent to the BOA and 20 per cent to the IOC. The BOA is also entitled to a further £5 million bonus marketing payment following the success of Locog’s marketing campaign, which is due to be paid from any Games surplus.

The action taken by the BOA appears aggressive, but comes as the latest government accounts show the Paralympics, universally acknowledged as a loss-making operation, will cost nearly £200million and put at risk any possible surplus.

If the court hears the case and rules in the BOA’s favour, the body could benefit by £35million to £80million, and the country’s grassroots sporting system and sporting facilities could be boosted by between £100million and £240million.

It is understood the BOA is planning foundation trust distributions to all of the Olympic national sporting bodies, including the Paralympic sports, if its claim is successful.

If the court rules the Paralympic costs should be separated from the Locog budget, then the government would be legally exposed to prop up the Paralympics by the corresponding amount of the Olympic Games surplus.

If it rules the Paralympics can be included in the Locog budget then there is unlikely to be any profit to be distributed. Separately, the IOC is preparing to issue its own ruling on the joint marketing programme agreement, possibly on Friday.

Further clouding the issue, the Minister for Sport Hugh Robertson declared only last month that if there was any profit from the budget the first claimant would be the Treasury.

The Government recently revised its contribution to Locog for staging the Paralympics to £95million, an increase of nearly 50 percent. This figure is publicly stated as being half the costs of the Paralympics.